Could better

interfaces have
prevented Macondo?
Nano scale
geochemical sampling
Maersk's plan to make
CCS pay for itself

Apr 2011 Issue 30

Does pulsing EOR make it more effective?

Post Stuxnet - expect government IT hacking

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 Is subsurface data
integration the most
important technology?
David Bamford
Consultant Editor, Digital Energy Journal
Apr 2011 Issue 30
Around the turn of the year, Barclays Capital published its annual review of
Digital Energy Journal the oil & gas industry, including within it a summary of its survey of the Most
2nd Floor, 8 Baltic Street East, London EC1Y 0UP, UK Important Technologies, based on the percentage responses received for each
Digital Energy Journal is part of Finding Petroleum
www.findingpetroleum.com
of 12 candidate technologies.
www.digitalenergyjournal.com As in 2009 and 2010, the top 3 for 2011 were Fracturing/Stimulation, Hor-
Tel +44 (0)207 017 3405 izontal Drilling and 3D/4D Seismic, accumulating between them more than
Fax +44 (0)207 251 9179 70% of the responses. What’s more, the same 3 have dominated this survey for
all 12 years for which data was published, invariably accumulating more than
Editor 60% of the responses between them. Over this period, the only other technolo-
Karl Jeffery
jeffery@d-e-j.com gy to win more than 10% of the responses has been Directional Drilling, gar-
nering 11% four times.
Consultant editor One way to look at these results is to say that responses may be dominat-
David Bamford ed by professionals working in North America and that the favoured technolo-
Technical editor gies will therefore simply reflect what is happening there, in particular the pur-
Keith Forward suit of shale gas, shale oil, ‘tight’ gas, coal bed methane, as the domestic sources
forward@d-e-j.com of conventional hydrocarbons begin to diminish.
But there is another way to look at it, I suggest. The survey-leading tech-
Finding Petroleum Forums nologies are those that offer the means to identify the presence of hydrocar-
Digital oilfield - subsurface data - April 20
Technologies to avoid another Macondo - May 17 bons in ‘tougher’ reservoirs and then extract them. Put another way, wherever
Digital Oilfield IT infrastructure - June 2 there is a prolific source rock, our industry has developed the capacity to move
Focus on unconventionals - Sept 20
Improving inventory management - Oct 4 away from conventional reservoirs – whether sandstone or carbonate – with
Exploring in the Arctic - Oct 11 good porosity/permeability characteristics and extract petroleum wherever it is
People and the digital oilfield - Oct 20 ‘reservoired’ – whether still in the source rock, in ‘tight’ sands, in fractured
Onshore 3D seismic - Nov 9
Collaboration and the digital oilfield - Dec 1 basement and so on. The North American industry is leading this charge.
If this is a fact, perhaps this should precipitate a dramatic change in the
Social network way many explorers think?
network.findingpetroleum.com The starting point needs to be plate tectonics, palaeo-drainage systems
and palaeo-climatology so that we can arrive at view of where prolific source
Advertising and sponsorship
John Finder rocks exist; and then understand petroleum systems in an integrated fashion so
Tel +44 (0)207 017 3413 that we can model a source rock’s maturation history and predict where ex-
jfinder@onlymedia.co.uk pelled hydrocarbons might have migrated to – if indeed they have left the
source rock! And then we need to understand the dynamic properties of these
Digital Energy Journal - keeping you up to date
with developments with digital technology in
‘unconventional’ reservoirs.
the oil and gas industry. Now at this moment, I can hear a large group of both ex- and current col-
leagues saying “That’s what we always do!” And that of course is
Subscriptions: Apply for your free print or elec- true…………… in some cases.
tronic subscription to Digital Energy Journal on
our website www.d-e-j.com
However, for the first step in understanding regional geology, what is ob-
vious is that extraordinary amounts of very different types of data are now
Cover photo: The KS Titan 2 rig, operated by available in the public domain to supplement the proprietary data a company
Atlantic Oilfield Services and chartered to might itself hold, whether rock samples, geochemical analyses of seeps, well
ExxonMobil, with a Marlink Sealink VSAT logs, seismic and so on.
communications system installed, providing 256 Integrating this mountain of data and making sure everybody is looking at
kbps data communications and 8 telephone lines,
the same thing is both difficult and time-consuming, and demands innovative
to be used for real time data management and
data sharing. Atlantic Oilfield Services operates technologies. I have mentioned before that I am especially taken with the ap-
rigs in Arabian proach of Neftex Petroleum Consultants Ltd whose Earth Models have a glob-
Gulf, Egypt, al chronostratigraphy, capable of separating ‘events’ 50,000 years apart, at their
Kurdistan - heart. By the way, I own no shares in this company!
Northern Iraq,
Indonesia,
Nigeria, the
North Sea,
David Bamford is non-executive director of Tullow Oil, and a past head of explo-
Pakistan and
ration, West Africa and geophysics with BP
Tunisia.

Printed by Printo, spol. s r.o., 708 00 Ostrava-Poruba,

Czech Republic. www.printo.cz
Apr 2011 - digital energy journal 1
 Contents
Leader
Better interfaces might have prevented Macondo – Chevron VP
“It is apparent that the Deepwater Horizon crew had information they needed to know [to prevent disaster] and took no action,” said David
Payne, Chevron’s vice president of drilling, speaking at the GE Oil and Gas Annual Meeting in Florence on January 31st
4
Exploration
Should you replicate databases locally?
When people are working on the same data in different places around the world, should the data always be stored and accessed from a
central server (like with webmail), or a copy downloaded onto a local device (like with Blackberry e-mail)? By Philip Neri, VP marketing with
Paradigm 6
Wireless Seismic – getting ready for
commercial launch
Wireless Seismic Inc of Colorado is gearing up for a
commercial launch, manufacturing and selling a wireless
seismic acquisition system which can send all recorded
data back to a recording truck in real time, wirelessly,
eventually with up to 100,000 channels 8
Using chemical sampling to decide where to
drill
Geochemical sampling gives you an alternative view
about whether your chosen drill site is likely to lead to
hydrocarbons, said Dirk Hellwig, regional director of
exploration with Gore Surveys 10
Santos sponsors Open Source software for
better reservoir visualization
Australian energy company Santos is sponsoring Open
Source technology that is improving collaboration
between its geoscientists, who can now work on their
subsurface data models from just about anywhere 12

Production
Your IT department is not ready
Many people assume that upstream technical organizations already have technical processes covered. They rarely do, writes Dutch Holland 14
Increase production 25-200% by pulsing EOR
The effectiveness of enhanced oil recovery by flooding can be improved if the injection fluid (water or carbon dioxide) is pulsed, says Alberta
company Wavefront Technology Solutions Inc. 16
Maersk – plan to make CCS pay for itself
Maersk Oil and Gas believes that it can significantly reduce the costs of carbon capture and storage of carbon dioxide sequestered, by
burning gas directly from an oilfield in oxygen, generating electricity, using the resulting CO2 immediately for enhanced oil recovery, and
possibly selling the resulting water if it is in a region of water shortage (for example, desert) 17
Survey of spend analytics
OFS Portal surveyed 6 oil and gas operators who had recently done spend analytics programs to ask them how it went - By Elaine Rothman,
writing for OFS Portal 20
Post Stuxnet – expect government hacking
After the Stuxnet worm attack which ‘created problems’ for Iranian nuclear centrifuges, every government in the world will be honing up its
hacking skills – and testing them out on IT installations with a military value, like oil and gas companies, thinks LogRhythm’s Eric Knight 22
GE Oil & Gas - $210m on research
GE Oil & Gas reports that it is quadrupling its research
funding 23

Apr 2011 - digital energy journal 3

 Leaders
Better interfaces might have prevented
Macondo – Chevron VP
“It is apparent that the Deepwater Horizon
crew had information they needed to know
[to prevent disaster] and took no action,” said
David Payne, Chevron’s vice president of
drilling, speaking at the GE Oil and Gas An-
nual Meeting in Florence on January 31st.
“These were experienced men,” he
said. “My theory is that the interface [provid-
ing information about drilling operations]
was too complex.”
“The Macondo incident is a wakeup call
that as wells become more and more complex
we have to think about how we manage the
man machine interfaces.”
“How may engineers spend time learn-
ing about capacity of human brains? We need
to get engineering solutions to match up with
the people.”
“Simplifying the human interface is an
engineering problem most engineers don’t
want to deal with.”
There are actions the industry can take
to improve things after Macondo, which are
“nothing to do with politics and everything
to do with engineering,” he said.
“We need to focus on simplicity and
standardisation,” he said.
“A good engineer is not one who can
deliver the most complex project. My
favourite engineer invented the bicycle. The
basic design has not been changed since
1817.”
“Even when the solution is complicat-
ed, enabling a human interface is critical.”
“The Macondo and Montara (East Tim-
or) incidents have changed my view on what
is required,” he said. “They have impact on
our ability to operate our business. The inci-
dents provided us with an opportunity to re-
view internal processes and close some gaps.”
“We have no right [to operate] any-
where,” he said. “We are provided a license
by the public. We have to earn that every
day.”
Boeing story
Macondo could provide a wake-up call to the
oil and gas industry, similar to the one which
hit the US military aviation industry in 1935,
in a competition between Boeing and Martin
& Douglas to design a new fighter aircraft,
he said.
Boeing nearly lost a competition to
build the next generation long-range bomber
for the US Army Air Corps, because the aero-
plane it built was too difficult to fly.
4 digital energy journal - Apr 2011
Before the flight test, Boeing’s Model
299 was considered much better than the de-
signs of its competitor, Martin and Douglas,
since it could carry 5 times more bombs than
the Army had requested, could fly faster and
further. So the flight test was considered
something of a formality.
But in the test, the Boeing plane
climbed to 300 feet, stalled and crashed,
killing the pilot, the US Army Air Corps chief
of flight testing, one of the most experienced
pilots in the US.
The subsequent investigation revealed
that the crash was due to ‘pilot error’ or more
specifically, the pilot had forgotten to release
a locking mechanism on the elevator and rud-
der controls during take-off.
But the pilot had plenty of other things
to occupy his mind during take-off, includ-
ing the engines, landing gear, wing flaps,
electric trim tabs, and propellers.
After Martin and Douglas was declared
the winner of the competition, Boeing went
back to the drawing board to try to work out
how to make their plane easier to fly.
They couldn’t suggest that pilots should
just have more training, since the plane had
been crashed by one of the most well-trained
pilots in the US. But they came up with the
idea of a checklist for everything pilots need-
ed to think about in take-off.
Using the checklist, the Army went on
to order 13,000 aircraft, and it became the
B17 Bomber, making a big contribution to
beating Nazi Germany.
Learning from other industries
Mr Payne is skeptical that the oil and gas in-
dustry should learn how to be safe by copy-
ing how the US nuclear power, US nuclear
submarine and air transport industry manage
risks, as many people have suggested. The oil
industry is much more complex.
“The US nuclear submarines have a sin-
gle fleet and a single boss,” he said. “Airlines
have a handful of companies. In the US, there
are 104 nuclear reactors and 25 operators.”
To compare with the oil industry, “In the
US there are hundreds of operators and thou-
sands of producing facilities,” he said. “Any-
one with a lease and a bank account can drill
a well. I’ve seen guys drill without the sec-
ond of those.”
“We have a very complex business. Our
wells facilities and companies don’t look
alike.”
Standards
Mr Payne says that there is a perception that
American Petroleum Industry (API) stan-
dards are based on the ‘lowest common de-
nominator’ – ie the level of performance of
the worst performing company is adopted as
the minimum standard the industry must fol-
low.
“Whether or not that’s true, the percep-
tion has to change,” he said. “When the pub-
lic loses faith we are forced to take action.”
At API, “we are doing a lot of very
good work,” he said.
“We need to do more standardisation,”
he said. “We have difficulty standardising in
our own companies let alone across the in-
dustry. We have an inability to standardise
on subsea trees and manifolds.”
The nuclear power station, nuclear sub-
marine and aviation industry have managed
to adopt standards, he said. “None of their
templates fit our industry but that’s not an
excuse not to look for a solution.”
Wide reaching impact
One characteristic of the oil and gas indus-
try is that any problem by one company has
a wide reaching impact.
To continue the comparison with retail,
if a superstore has a fire, nearly all of the im-
pact is local. But if there is a large failure in
the oil and gas industry, it impacts every-
body’s license to operate, he said.
“Demanding everyone in our industry
holds to the same high standards is critical,
Mr. Payne added.”
Proud of oil and gas
“I am unabashedly proud to be working in
oil and gas,” he said. “I work in an industry
that actually matters. If we get a bigger HD
set or iPod, it doesn’t actually matter. But if
we didn’t do what we do, lights go out, trans-
portation doesn’t run, people’s lifestyles
change.”
Mr Payne cited data from the US De-
partment of Labor Bureau of Labor Statis-
tics, which shows that the oil and gas indus-
try is safer than retail (the 2009 data shows
4.2 occupational injuries per 100 workers in
retail, compared to 1.6 in oil and gas).
“Consider that,” he said. “We have a
highly complex, diverse industry that’s safer
than retail.”
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 Exploration
Should you replicate databases locally?
When people are working on the same data in different places around the world, should the data always
be stored and accessed from a central server (like with webmail), or a copy downloaded onto a local
device (like with Blackberry e-mail)? By Philip Neri, VP marketing with Paradigm
Companies managing assets over large, if not
global, geographical areas often operate these
assets from multiple locations, with at least
one office positioned in the assets’ state or
country, and with activity taking place at a
centralized technical location, be it the com-
pany’s headquarters, regional main office or
elsewhere.
For the best efficiency, it is important
that each geoscientist, engineer or data ad-
ministrator be looking at the same collection
of data wherever they are working from, in-
clusive of all the most recent edits, transfor-
mations and metadata that may have been
contributed at any of their locations.
Data strategies may be relatively easy
to implement if all locations are in close
proximity, and in a region where network in-
frastructure offers good bandwidth and relia-
bility. But processes become more involved
if (for example) the operating unit is periodi-
cally disconnected from a wide area network,
and on a low-bandwidth connection.
Background
In the 21st century, technology has brought
together distant places at a pace that was not
anticipated some 15 or 20 years ago.
In the energy industry, many companies
had trans-regional or international operations
from the very early days of oil and gas ex-
ploration and production.
However there was not an expectation
of frequent and intensive communication and
collaboration, and remote or regional offices
would operate as independent entities in
terms of their data, their activity and their re-
sources.
Two factors concurrently put pressure
towards a change in the way operations are
conducted: the increase in reservoir complex-
ity, and the need for more advanced technolo-
gies in order to be successful.
It became increasingly unrealistic to
populate each operating unit with all the
highly-skilled resources that would be re-
quired oftentimes only on an occasional ba-
sis. Putting experts from a central pool onto
airplanes on an on-demand basis was the al-
ternative, but this was not a very effective use
of such high-value persons’ time. The solu-
tion that emerged as the most effective was
to have teams working both on location, close
to assets, and in one or more central facilities
where specialists can cover a wide diversity
6 digital energy journal - Apr 2011
of specialized tasks for nu-
merous field locations. Satel-
lite links, video-conferencing
systems and improving infra-
structure made it easier and
easier for such geographical-
ly-separated teams to work
together.
With two or more teams
working on different aspects
of a same asset at the same
time, the one element that still
needed to be addressed was
the synchronization of all the
data being worked on such Satellite links and video-conferencing systems made it easier
that at all times each team for geographically-separated teams to work together
would see and be able to use
information, knowledge and
results emanating from the other team. tions in developing countries where network
The two main options for how people infrastructure is not yet fully established and
work with data are (i) multiple views on a reliable.
single database (like looking at your hotmail
from anywhere in the world); or (ii) replicat- Replicated databases with
ed databases with synchronization (like how synchronization
your Blackberry can download your e-mail, But many companies choose to have a copy
but the main e-mail database is somewhere of the complete project dataset running local-
else). ly, in order to shield each operational loca-
tion from any wide area network (WAN) in-
Single database multiple views terruption or performance degradation.
With a single database multiple views archi- They end up replicating many hundreds
tecture, all the data, the applications and the of megabytes, or even terabytes, of data mul-
compute power are located in a centralized tiple times.
server facility. The relatively low cost of storage makes
Users log in remotely, and execute the this a reasonable choice when set against
applications remotely. The graphical inter- tight work schedules and other business pri-
face and the display of results is transferred orities.
over the network to show up on the user’s The challenge is to ensure that at all
screen, wherever he or she may be. times updates made at any one of the opera-
From a data management point of view, tional locations becomes available to the oth-
the only vital requirement is a very rigorous er locations within a reasonable time-frame.
management of data ownership. As a project While any granularity of an updating
moves forward, the interpretations and re- process would be envisaged, in most cases a
sults generated by each user must be clearly daily refresh is considered satisfactory, espe-
labeled as such. There must be flexible capa- cially if the locations are linked by weak net-
bilities to establish and enforce policies that work connections.
define who can see, re-use, edit or delete dif- The data management infrastructure
ferent types of data created by other mem- must then run a synchronization process that
bers of the geographically-distributed team. will make it possible to compare activity on
This centralized architecture is of the different versions of the dataset since the
course very dependent on the quality, speed last update took place, and perform an update
and reliability of the network, and for mis- of all instances such that once the synchro-
sion-critical activities many companies still nization process has run all the most recent
see a risk factor for remote users either oper- edits, modifications, new objects or other
ating on or close to drilling facilities (i.e. changes to data are reflected and identical in
away from major urban areas), or for opera- each place.

Portable devices
With increasingly high-powered portable
computing resources, many companies now
entrust field geoscientists and engineers with
increasing amounts of data and sophisticat-
ed applications that allow them to integrate
new data, perform comparisons with initial
models or older data, review surrounding or
regional data, and perform other tasks that
involve both large data collections and sub-
stantial compute capabilities.
Field locations, often at a distance from
major communication networks, favor a
stand-alone operational model where the
portable computer is assumed not to be con-
nected to any remote resources.
On returning to a more substantial fa-
cility, there will be the same need for syn-
chronization between the portable device
and the company database.
Data ownership
In all scenarios, remote access to shared sys-
tems, synchronization of replicated databas-
es or dealing with offline portable devices,
probably the most important feature of a da-
ta management infrastructure is the ability
to label and control the access / edit permis-
sions of each data item for individual users
or groups of users.
Rigorous control systems are often per-
ceived as inhibiting productivity, but on the
long run they actually act as a facilitator in
ensuring project data integrity and in solv-
ing inconsistencies in results.
For example, if two or more users are
editing a same data instance, it is better that
they each work on their version of the item,
while being able to see the progress their col-
leagues are making.
Selective copy and paste utilities can
help take on and leverage the work of oth-
ers, but each version is under the complete
control of the respective users.
Synchronization processes will keep all
sites updated, but will not result in overwrit-
ing any one user’s data with the version or
versions of other colleagues.
At some point, when work is close to
completion, decisions can then be made to
merge different user contributions into a sin-
gle final entity.
Should the final version later be chal-
lenged, it is possible to go back to the indi-
vidual contributions and check to see if the
best choices were made when merging.
Exploration
Modern high-quality data is rich in information;
this illustration of a 3D rendering of a channel
system is of interest to many disciplines: geology,
sedimentology, stratigraphy, reservoir
characterization and drilling engineering
Maturity
The management of terabytes of geoscience
and engineering data over the many years of
an oil and gas asset’s life cycle is critical in
order to ensure that the accrual of knowledge
and information is always accessible and put
to use for future operations.
The maturity of the data infrastructure
that supports the asset, and its alignment
with the business model of a distributed
global industry, will impact significantly the
efficiency of the teams working towards op-
timal exploration and production outcomes.
 Exploration
Wireless Seismic – getting ready for
commercial launch
Wireless Seismic Inc of Colorado is gearing up for a commercial launch, manufacturing and selling a
wireless seismic acquisition system which can send all recorded data back to a recording truck in real
time, wirelessly, eventually with up to 100,000 channels.
The company has been developing the tech-
nology since its founding in 2006, and is
now ready to become a “full blown commer-
cial operation late this year (2011) or early
next,” said company chairman Gary Jones,
speaking at the Jan 25 Finding Petroleum fo-
rum in London, “advances in seismic”.
“We believe we are disruptive technol-
ogy in an established market and that’s a
good place to be,” he said.
The company expects that “up to 50 per
cent” of land seismic recording systems will
be cable-less in the next 3 to 5 years, an in-
crease from about 7 per cent of systems sold
in 2010.
“There are now authorities in the US
requiring companies to go for cable free sys-
tems – we expect that trend will continue,”
he said.
The company already has 2 customers
and a third one is ready. “We’re happy to
take orders,” he said.
It has committed an initial run to man-
ufacture the devices, and wants to see how
well they are performing in the field before
commissioning any more.
There are several cableless seismic sys-
tems already on the market, but these are
mainly autonomous blind recording systems
which store the data locally in a memory for
later retrieval. Wireless Seismic claims to
be the only system which delivers the data
from large numbers of channels in real time
to the recording truck.
Gary Jones, chairman, is previously
president of WesternGeco and also a direc-
tor of Ingrain, ARKeX and Novadrill.
In December the company announced
$19.5m in its latest funding round, from
Chesapeake Energy, which claims to be the
second largest producer of natural gas and
the most active driller of new wells in the
US, and Energy Ventures, an energy venture
capital company.
Real time data
The seismic data is recorded by cable-free
transmitters and sent back to a central base
station wirelessly, which means that it is all
immediately available for processing, not
stored on the receiver units until they are col-
8 digital energy journal - Apr 2011
lected later.
By mak-
ing the record-
ed data avail-
able in real time
in the central
recording truck,
it can be quality
checked imme-
diately and any
problems recti-
fied, rather than
only going
through the da-
ta a few weeks The wireless seismic equipment on the small truck on the left can do as
later. many channels as the cabled equipment on the large truck on the right
“Our the-
sis is quite sim-
ple - that real time data matters and its pret- Cables are dangerous. “Most lost time
ty imperative,” says Mr Jones. “How many injuries in seismic crews are called by trips
people would prefer to get their data back in slips and falls mainly due to neck rolling ca-
real time if they could on a cost competitive bles [people rolling cables around their
basis?” necks], “he said.
Some earlier wireless seismic devices “If you can eliminate the cables you’ll
stored the recorded data in onboard flash get more uptime, less cable troubleshooting
memory devices for downloading later, a and safer operations.”
very tedious job. “I hate to be the person try- “We are aware of increased environ-
ing to transcribe a million channels of data mental footprint for less line cutting. Every-
collected through flash memory and putting one .. would accept there’s a strong case for
them in proper order for data processing. this direction.”
That’s a tough challenge,” he said. “Road and river crossings become a
By immediately transmitting the data to breeze if you have a cable less system.”
a central location, it avoids the risk of data You can carry the same amount of
being lost, for example if a recording unit is channels on a mule if they are wireless, as
stolen or damaged before the data on it is you can with a truck and trailer if they are
collected. cabled.
There are two separate wireless com- There is also a lot more flexibility in
munications systems involved – a short hop survey design. “One of the beauties of going
system between individual wireless remote wireless is that we’re going to free up your
units (WRUs) along a line to a backhaul unit, geophysicists,” he said. “We can do coil de-
and then a longer range communication sys- signs, triangular designs, all sorts of designs
tem from the backhaul unit back to the cen- that will allow for better geophysical attrib-
tral recording truck using a different radio utes. “
frequency and 20 foot high antennas. “You can do variable density of line
spacing. If you ‘ve highlighted some areas
Better without cables of greater interest through gravity gradiome-
A seismic survey without cables should be try survey ahead of time, you might want to
much faster to deploy, because transporting double up your density there.”
and laying cables takes a lot of time. And the
faster the survey can be done, the cheaper it Wireless remote units
can be done. The wireless remote units, which are spread

around the recording area in their thousands,
each weigh about 4 pounds (1.8kg) not in-
cluding batteries. A string of geophones can
be plugged into it.
To switch the unit on, you just turn it to
a certain position – an accelerometer inside
the device switches on the electronics.
Then you put it down and plug in geo-
phones, and it runs through a series of tests.
The units have GPS in them so they
know their location. Each wireless unit will
look for nearby wireless units and commu-
nicate with them. Then they go into a quiet
state (to save battery power) and wait for in-
structions.
The units also have a clock which is
disciplined (synchronised) from the record-
ing truck, rather than by using a GPS clock.
“It works faster and with greater precision
than the GPS clock,” he said. The clock is
disciplined all the way through the record-
ing, so it does not lose synchronising part-
way through.
The system will work in the full tem-
perature range from the Arctic to the desert,
and will record at under 10hz and up to
200khz.
The unit has 8 different levels of power
consumption, and will automatically use the
lowest power consumption which will carry
Exploration
the data communications required.
Two batteries in the WRU will provide
at least 17 days field life, he said. Batteries
will normally last for the duration of the sur-
vey, so they won’t need to be replaced part
way through.
The charging status of both batteries
can be monitored remotely from the record-
ing truck.
The batteries can be charged up easily
using a power supply in a hotel room. Elec-
tronics in the battery can manage the charg-
ing process and show whether the battery
needs more charge or the charging is fin-
ished. “We decided to go for smart batteries
and dumb chargers,” he said.
Backhaul unit
Midway along a line of up to 120 wireless
remote units, you position a backhaul unit,
which sends the data back to the central
recording truck.
The backhaul unit has a 20 feet high an-
tenna, which telescopes. It can be carried by A wireless receiver unit in operation
one person and deployed in 10 minutes.
Some people asked for a fibre optic ca-
ble for the backhaul. “We have that in case in short distance data communications tech-
someone really wants that. But the wireless nology, and the speeds continue to increase.
data backhaul is not the bottleneck,” he said. “We’re expecting 3-5 times increase in the
There have been many recent advances very near future in that capability,” he said.
 Exploration

Using chemical sampling to decide

where to drill
Geochemical sampling gives you an alternative view about whether your chosen drill site is likely to lead
to hydrocarbons, said Dirk Hellwig, regional director of exploration with Gore Surveys
By using Gore Amplified Geochemical Im-
aging service, you can get an alternative
view about whether or not your chosen drill
site is likely to hit oil, said Dirk Hellwig, re-
gional director of exploration with Gore Sur-
veys, talking at the Feb 15 Finding Petrole-
um London Forum “advances in exploration
technology”.
The results of a Gore geochemical sur-
vey are to be integrated with other G&G and
are able to derisk drilling decisions signifi-
cantly, he said.
From more than 600 exploration sur-
veys, Gore was able to obtain validation da-
ta on 179 drillsites where the system was
used, and a well was consequently drilled.
For drill sites where the Amplified
Geochemical Imaging predicted prospectivi-
ty for hydrocarbons, hydrocarbons were
found 93 per cent of the time. So the opera- The sampling units (GORE Modules) let vapour pass through but block liquids, like the
tors achieved a 93 per cent success rate from membrane on your Gore-Tex jacket
drilling, something any exploration compa-
ny would be pleased with.
For drill sites where the geochemical Once the geochemical samplers have can pass through the fabric into the sample
imaging predicted that there wouldn’t be any been analysed, Gore draws probability maps, device, but not liquids.
hydrocarbon, and yet the well was still showing the likelihood of hydrocarbon pres- The sampler contains adsorbent mate-
drilled, it turned out to be dry 92 per cent of ence in different areas of the map. rials which capture the hydrocarbons from
the time. the gas.
The system can be used for reservoirs Sampling units For land surveys, the sampling units are
below salt: it successfully showed the loca- Gore has developed a special sampling unit long narrow tubes, which are dropped into a
tion of hydrocarbons in Egypt beneath which can detect a much broader range of hole 1cm diameter and 50cm deep. They are
3.5km of salt, using sample modules with hydrocarbons than conventional soil gas left in the soil or seabed for about three
250m spacing. sampling, and therefore more useful infor- weeks.
It can also be used on stacked reser- mation about the likely presence or absence For offshore slick surveys, the sampler
voirs, differentiating the signal from the dif- of hydrocarbons beneath a specific spot on can be dragged through an oil slick for a few
ferent reservoirs, provided calibration by the earth’s surface. Also the sensitivity of the minutes to see what it can collect.
tested wells. However the system cannot tell method is orders of magnitude higher than Alternatively, you can use a coring tool
anything about the depth of a reservoir or in conventional sampling. to collect about 100cm3 of seabed sediment,
volumetrics. The Gore Module captures hydrocar- put it in a jar and put the sampling module
Over the past 18 years GORE Surveys bon compounds from 2 up to 20 carbon inside the jar for 3 weeks.
have carried out over 600 surveys, in a range atoms long, compared to conventional soil Sample units are normally laid out in
of different terrain, from desert to permafrost gas geochemistry which can capture C1 to grids, at 200-250m distance for high resolu-
soil and swamps, onshore and offshore. C5. tion surveys and 2km distance for low reso-
The presence or absence of C6 to C20 lution surveys.
Wide area survey molecules is very important in working out The sampling units are subsequently
The system can also be used to survey a wide if there are hydrocarbons below. shipped to Gore’s laboratory for high defini-
area, and get a low resolution idea of which Gore is famous for making the Gore- tion chemical analysis, on a nanogram scale.
regions are worthy of deeper study, with Tex membrane, used for waterproof clothing They are first put through a thermal desorp-
sampling units placed every few km. and which allows vapour to go through, but tion process, to remove the hydrocarbons
For sampling macroseep sites, Gore not water. This means that the clothing can from the adsorbent material, before the gas
works together with satellite company Astri- breathe while keeping the wearer dry. is analysed by Gas Chromatography and
um, which maintains a global database of The chemical sampling devices feature Mass Spectrometry.
seeps which is continually updated. a similar membrane technology – so gases

10 digital energy journal - Apr 2011

 Recent
R ecent free
frre
ee
e videos on
o the
F
Finding P e ro
etroleum w
Petroleum e
ebsite
website
Learn about de
Learn developments
velopmen nts with wireless
wireless
Wireless seism
Wireless seismic
mic
seismic,
s imaging, peak oil,
eismic, geochemical imaging,
W atch Gar
Watch Garyy Jon es, chairman of Wir
Jones, eless Seismic
Wireless S and a
past president
president o
off WesternGeco,
WesternGeco, speak abo out the
about fifibre
bre optics as listening d evices, EOR
devices, EOR
contribution wireless
wireless
e surveys
land seismic sur veys can make
make to fifinances,
nances, automated w elll workover
well workover tools
improving
impr production
oving pr oduuction and rreducing dryy w
educing dr wells
e on land, b
ells byy a
and nd much, much mor moreebbyy w atching fr
watching ee
free
providing
providing a bette
better
er understanding of subsu
subsurface.
rface. vvideos
ideos from Finding P
from etroleum
o
Petroleum forums,
forums,
Findingpetroleum.com/video/195.aspx
Findingpetroleum
gp m.com/video/195.asp px a vailable on the Finding Petroleum
available Petroleum website.
website.

Geochemicall im
Geochemic imaging
m ging
maging
Watch
W atch Dirk Hellwig,
Hellwwig, Regional
Regional Director
Director of Exploration
E
Exploration
GORE Surveys, how
Surveys, talk about ho w nano scale e geochemical
geochemical
imaging can make red
make a big contribution to reducing
ducing dry
dry
w ells, by
wells, by detecting
detecting and analysing
analysing tiny
tiny samples
sam mples of different
different
types of hydrocarbons
hydrocaarbons at the ear
earth's
th's sur
surface,
fac
ce, which ha
have
ve
travelled
travelled up from m reservoirs.
from reservoirs.
Findingpetroleum.com/video/199.aspx
Findingpetroleum
gp m.com/video/199.asp px

Future
F uture of land 3D3 seismic
W atch Ian Jack,
Watch Jack, fformer
ormer head of subsur face R&D with BP
subsurface
and initiator of the
th
he first "life
"life of field" seismicc monitoring
ssystem,
ystem, talk about
aboout how
how land 3D seismic surveys urveys are
su are
about to get much
muc ch better,
better, pr oviding a muc
providing much h better
understanding ofo the subsurface.
subsurface.
Findingpetroleum.com/video/202.aspx
Findingpetroleum
gp m.com/video/202.asp px

Peak oil
Peak
Watch
W atch David
David Bamford,
amford, ex
Ba ex head of exploration
explorattion at BP,
BPP,
discussing whet her or not w
whether e will see peakk oil in the n
we ext
next
decade..
decade
Findingpetroleum
gp m.com/video/243.asp
Findingpetroleum.com/video/243.aspx px

Fibre optics as
Fibre s listening de
devices
vices
Watch
W atch Doug Gibson,
Gibbson, CEO
CEO of Fotech, talking
Fotech, talki ng about using
fibre optics as lis
fibre stening de
listening vices, so you
devices, you get
geet a much
clearer
clear er understanding
understaanding of what is happening
happenin ng in your
your well.
well.
Findingpetroleum.com/video/245.aspx
Findingpetroleum
gp m.com/video/245.asp px

Financials of EOR
EOR
Watch
W atch Oswald
Oswald Clint,
C analyst
senior analy st with Bernstein
Be
ernstein
Research,
Research, one ofo WWall
all St's top analyst
analyst companies,
commpanies, talking
about what is proven
proven to work
work (financially) and
a what
doesn't, with enhanced
enhhanced oil recovery.
recovery.
Findingpetroleum.com/video/250.aspx
Findingpetroleum
gp m.com/video/250.asp px

Robots for
Robots for workovers
worrkovers
Watch
W atch Jørgen
Jørgen HHallundbæk,
allundbæk CE
allundbæk, CEOO of WWelltec,
ec, talking about
ellte about
using robotic devices
robotic de v
vices wells
inside wells to massively
masssively reduce
reduce the
cost of doing workovers.
work
o overs.
Findingpetroleum.com/video/244.aspx
Findingpetroleum
gp m.com/video/244.asp px

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Browse our complete
c p ar
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chive of vid
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eo presenta
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gPetroleum.com
 Exploration
Doesn’t need seeps carbons collected from the sampling unit Ideally, you
Because the sampling units are so sensitive, have come from another source than a sub- would have a well
they are not restricted to only sampling oil surface reservoir. control – a produc-
which has travelled from subsurface reser- Mr Hellwig emphasises that conven- ing well in the re-
voirs through faults (Macroseepage). tional soil gas sampling can only normally gion – so you can
Miniscule quantities of hydrocarbons detect C1 to C5, and there can often be sim- compare the hydro-
can also find their way through a seal rock ilar geochemical responses for C1 to C5 carbon signature in
up to the surface. whether there is a reservoir below or not. the zone of interest
This process is known as Microseep- “So if you restrict yourself to the C1 to C5 with the signature
Helping you detect
age, with microbubbles of gas moving up you might not be accurate,” he says. around the produc- hydrocarbons from
through grain boundaries in the rock, driven Gore also has an idea what typical hy- ing well. sampling tiny
by pressure and buoyancy. “This occurs in drocarbon signatures above different types If there is no amounts in the
every type of lithology,” Mr Hellwig said. of reservoirs (gas / oil) look like based on its producing well, then surface soil gas -
experience so far, and that is helpful when you can analyse the Dirk Hellwig, GORE
Surveys for
Signal from noise trying to understand the information. data to look for sim- Exploration, W.L.
One challenge with the system is detecting Gore’s system does not measure ilarities in the geo- Gore & Associates
signal from noise – ie it is not enough just to methane (C1) at all, because methane is chemical patterns,
have a sample from above a possible reser- ubiquitous and a differentiation between aided by Hierachical
voir, you also need a sample which is thermogenic and biogenic methane is need- Cluster Analysis, to
nowhere near a reservoir and compare them. ed. This involves isotopic analysis, an addi- develop geochemi-
There is also a possibility that hydro- tional and complex process, he says. cal calibration points.

Santos sponsors Open Source software

for better reservoir visualization
Australian energy company Santos is sponsoring Open Source technology that is improving
collaboration between its geoscientists, who can now work on their subsurface data models from just
about anywhere
In 2010 Santos became a major sponsor of
VirtualGL and TurboVNC to enable employ-
ees to use their laptop PCs to interpret geo-
science data visualized by servers running
Paradigm software. Paradigm is a leading
supplier of exploration and development
software to the oil and gas industry.
Whether in a regional office, at home
or in an airport lounge, users can reconnect
to the same high-performance 3D graphics
session that had been running at their regu-
lar desk.
It enables real-time national and inter-
national collaboration and peer support be-
tween remote geoscience colleagues, irre-
spective of the number of participants or
their locations.
Feedback from geoscientists shows that
using this new technology via laptops easily
rivals the performance of more expensive
workstations, Santos says. This has led to
Use reservoir visualisation software wherever you are: in this photograph, a Santos geoscientist
many users swapping their traditional geo- is running TurboVNC from his docked laptop
science hardware in favour of running Tur-
boVNC on their laptop to display data and ously provided by individual high-end work- digital models of the Earth’s subsurface.
application images produced by Paradigm stations at the users’ desks, Santos says. The Open Source technology being pi-
and VirtualGL in Santos’ Adelaide headquar- oneered by Santos displays seismic data
ters. Benefits from prospective oil and gas fields, as well
The company’s users across Australia The software is used to locate new oil and as models of existing fields, to Santos’ of-
and south-east Asia now have shared access gas reserves and optimise production from fices in Australia and Asia.
to more processing power than was previ- discovered reservoirs by creating dynamic Significant investments in data are de-

12 digital energy journal - Apr 2011


pendent upon accurate interpretation and
comprehensive data management.
Combining Paradigm products with
VirtualGL and TurboVNC enables Santos to
serve its interpretation data and applications
from its headquarters in Adelaide, South
Australia.
The stability of the solution allows San-
tos to rely on this technology for the success
of its widely dispersed operations but the re-
al magic is in how fast the Open Source tech-
nology can render and deliver 3D graphics
back to a user’s desktop thousands of kilo-
metres away.
The move towards Open Source is sav-
ing Santos – Australia’s leading natural gas
producer – over $1 million a year in operat-
ing costs, the company estimates.
At the same time it is increasing the
speed with which data is interpreted and
models are analysed.
Darren Stanton, Geoscience Systems
Specialist and the architect of the Santos so-
lution, said the most exciting part of central-
ising seismic interpretation was the freedom
it afforded Santos’ geoscience teams and the
ability to collaborate between offices.
“Now that the processing power is
housed in the same server room as our stor-
age, much faster network technologies can
significantly reduce seismic data access
times,” Mr Stanton said.
“Our annual sponsorship of the Tur-
boVNC and VirtualGL projects gives us di-
rect access to the Open Source technical
brains that have made this all possible. Any
bug-fixes or feature enhancements are dealt
with quickly, and it’s not uncommon to have
a new version of code sitting in our inbox
ready for testing the morning after emailing
a request to the programmers.”
“The move to Open Source thin client
deployment has been a huge success for us
in so many ways, and we would encourage
other companies to adopt and support Open
Source technology.”
Finding Petroleum London Forums 2011
For latest developments, registration and to subscribe to our
newsletter see www.findingpetroleum.com
Limited free tickets available for each forum - exhibition and
sponsorship opportunities
• Digital oilfield - subsurface data
- April 20
• Technologies to avoid another Macondo
- May 17
• Digital Oilfield IT infrastructure - June 2
• Focus on unconventionals - Sept 20
• Improving inventory management
- Aberdeen - Oct 4
Exploration
VirtualGL and TurboVNC
To make it work, Santos has been sponsor-
ing development work on Open Source soft-
ware packages VirtualGL and TurboVNC,
which can enable high performance 3D
graphics software (such as Paradigm’s geo-
science interpretation suite) to work with a
thin client (such as someone’s remote laptop
computer).
VirtualGL is an Open Source program
which redirects the 3D rendering commands
from Unix and Linux OpenGL applications
to 3D accelerator hardware in a dedicated
server and displays the rendered output in-
teractively to a thin client located elsewhere
on the network.
TurboVNC accelerates the JPEG en-
coding paths. It can deliver a dual screen im-
age (3840 x 1200 pixels @ 20 frames per
second) over local and wide-area networks
including the Internet. Santos has seen out- Santos' Turbo VNC servers - enabling remote
standing results using TurboVNC in its access to 3D reservoir visualisation software
Jakarta, Indonesia, office to display Para-
digm projects running in Adelaide.
When Paradigm software is used to- The images generated are transmitted
gether with TurboVNC and VirtualGL, San- on a dedicated graphics subnet within the
tos’ geoscientists can view all their visuali- company’s network or via the Internet and
sations on any PC in a high performance 3D displayed on standard Windows laptops run-
graphics view regardless of their location. ning the TurboVNC client.
Open Source refers to software in which Santos developed its own web portal
source code is made publicly available for use to initiate the TurboVNC session and con-
or modification by others. Open Source soft- figure appropriate compression settings
ware is usually developed by public collabo- based on the user’s network connection. The
ration to progress information technology. portal also allows users to create and resume
Through its ongoing annual sponsor- their own TurboVNC sessions without log-
ship, Santos provides the Open Source team ging on and off as they move between desks
with the necessary financial resources to fur- or offices.
ther develop and improve TurboVNC and This new thin client technology has
VirtualGL. greatly simplified many aspects of data man-
agement, Santos says.
IT setup All Australian-based users now share
Santos uses IBM X3650 M3 servers running one common set of applications, databases
Red Hat EL5 with NVidia Quadro Plex 2200 and seismic data, removing the need for dis-
S4 graphics hardwareto create a VirtualGL crete islands of infrastructure and overnight
server farm which runs the Paradigm appli- synchronisation of data between Santos
cation suite in Santos’ Adelaide server room. sites.
• Exploring in the Arctic
- Oct 11
• People and the digital
oilfield - Oct 20
• Onshore 3D seismic - Nov 9
• Collaboration and the
digital oilfield - Dec 1
 Production
Your IT department is not ready
Many people assume that upstream technical organizations already have technical processes covered.
They rarely do, writes Dutch Holland
The term Digital Oilfield (DOF) practically
screams: “We have digital technology that
can make the company money, if we can just
get it deployed on the operations side.”
Translated: the technical side is ready
and just waiting for operations to catch up.
Unfortunately, such is not the case.
Upstream technical organizations today
are both ill-equipped, process-wise, and in-
appropriately staffed, oilpatch-wise, to help
their companies exploit digital technology’s
potential.
Business value architecture
When an upstream organization decides to
go for it to maximize digital technology use
for business value, the organization’s archi-
tecture (its “moving parts”) must be altered
and configured specifically for digital tech-
nology, called the DOF Business Value Ar-
chitecture (DOFBVA) of the organization.
This consists of:
Strategic Business Architecture: the
company’s DOF vision and strategic goals,
measures and incentives
Work Process Architecture: the tech-
nical and business work processes needed to
achieve DOF strategic goals
Technical Process Architecture: the
processes to manage digital resources re-
quired to enable work processes and busi-
ness value optimization.
Technical Process Architecture
Very specific technical workflows or
processes are required for the organization-
wide exploitation of digital technology.
While some of the processes below
may look familiar, some may be seen as
“new” for a company’s technology-end.
Five technical work processes, or orga-
nizational elements, must be in place and
aligned by senior managers to gain full busi-
ness value from DOF. These are Needs Dis-
cernment, Technology Architecture Design,
Acquisition, Systems Readiness, and Tech-
nical Implementation.
Needs discernment
A Business Needs Discernment Process that
accurately comprehends the range of opera-
tional transactions and decisions which
could be made by the business both now and
in the future will be needed.
14 digital energy journal - Apr 2011
The dictionary definition of discern-
ment is “the quality of being able to grasp
and comprehend what is obscure or not well
defined”.
This is a major challenge for what has
been called requirements definition.
Unfortunately, discernment may not yet
be a strong suit today in many upstream
technology units. Who has the discernment
to articulate appropriate needs?
Perhaps it is only technologists experi-
enced in both operations improvement and
technology design and development.
Therefore, staffing and managing the
interface between technology and operations
will be critical. The technology unit must put
its strongest people into the discernment
process.
At this point two things are clear: Dis-
cernment will always be necessary, and re-
cent graduates with a “Requirements Inter-
view Guide” will not be an adequate mecha-
nism for discerning needs.
Technology architecture design
A Technology Architecture Design Process
will be needed to optimize the company’s
technical capability to support all types of
work processes that the operations side re-
quires to meet its goals.
This is easier said than done.
A famous hockey player once stated
that the secret to his success was “to skate to
where the puck was going to be.”
Such is the challenge in the Design of
technology architecture - to position func-
tionality so that the operations side of the
business can skate toward the most vital and
productive business improvement opportu-
nities, using/counting on IT support to en-
able their direction.
As in the first technical process dis-
cussed, positioning architecture is depend-
ent on great discernment, based on the tech-
nologist’s understanding of both operational
upsides and technology capabilities.
The goal is not to just follow the direc-
tion of operation’s needs but to design-in
functionality and capability that might lead
operations to see and solve their business
and technical problems in fundamentally
new ways.
Technology architecture is at its best
when it can both follow and lead the opera-
tions side toward business value
Acquisition
A Technology
Acquisition
Process will
be needed to
both drive
vendor inno-
vation and to
acquire need-
ed technolo-
gies to sup-
port technolo-
gy architec-
ture design.
It’s not enough to build a
This de- DOF to fit the company -
ceptively sim- sometimes the company
ple statement has to change to work
requires a better with a DOF, says Dr
technology Dutch Holland, Holland
Management Coaching
architecture
design rooted
in current and future operational needs.
While some technologies may be de-
veloped in-house, many DOF technical ele-
ments will likely come from technical ven-
dors. The ideal would be for the technolo-
gist to give clear functional specifications to
vendors so that they might put their innova-
tion processes to work to serve up technical
elements meeting the needs.
However, many technical vendors to-
day state that DOF technology buyers are not
able to well-articulate functional require-
ments.
Rather than a buyer holding a require-
ments conference for several qualified ven-
dors, vendors are holding conferences to
show their wares, hoping to serve up one that
the buyers can see fitting into the company’s
future. And, as buyers acquire what’s being
sold, they accumulate bits and pieces that
must be cobbled together as requirements
eventually become clear.
Systems Readiness Process
A Systems Readiness Process will need to be
in place that can produce/ready apps and sys-
tems meeting Business Improvement Oppor-
tunity requirements.
As discussed in earlier articles, two dis-
tinct “readiness processes” are required for
digital technology: getting the technology
ready for the business and getting the busi-
ness ready for the technology.
Most technology shops have an appli-
 6th–8th September 2011| Aberdeen | UK

SPE Offshore Europe conference and exhibition attracts a

global audience of engineers, technical specialists, industry
leaders and experts to share ideas and debate the issues of
the moment in the upstream industry.

SPE Offshore Europe is a multi-faceted event that reflects the

E&P community’s desire for continuous learning, showcasing
the innovation, solutions and tools required to compete in
an accelerating technology race in an increasingly
complex business.

The Offshore Europe Partnership,

a joint venture between: For more information:
 Production
cations development function (Systems
Discern Architecture Technology Systems Secure Ready for
Readiness) containing a proven and refined Business Design Acquisition Readiness Implement Optimal
systems development process. Needs Process Process Capability Results
That process, used in a disciplined way,
Architecture Technology Systems Secure Unable to
will be key in digital technology deployment Design Acquisition Readiness Implement meet needs
X
- with a few twists. Process Process Capability of business
The first twist will be that systems
Discern Technology Systems Secure Inadequate
readiness will only be one of two key Business Acquisition Readiness Implement technology
X
processes. System Readiness and Business Needs Process Capability performance
Readiness efforts must be “joined at the hip,”
Discern Architecture Systems Secure Unrealized
targeting Business Improvement Opportuni-
Business Design X Readiness Implement business
ties enabled by digital technology. This Needs Process Process Capability goals
means some key people must have access to
Discern Architecture Technology Secure DOF Apps
both readiness efforts and have the discern-
Business Design Acquisition X Implement Fail to work
ment needed to modify plans and expecta- Needs Process Capability
tions.
Testing to perfection, a second twist, is Discern Architecture Technology Systems Business
critical for digital technology to be applied Business Design Acquisition Readiness X unwilling to
in operations … where a software failure is Needs Process Process implement
quickly seen as an immediate threat to
steady-state operations. Operations is not a
test environment. would think that all parts of operations perspective and daily work of a company’s
would be equally receptive to implementa- technology side. In short, many technology
Technical implementation tion in their units - but it is not so. shops approaching their DOF future have a
A Proven and Secure Technical Implemen- Unless technical implementation is long way to go in building technical process-
tation Process, in sync with business readi- proven bullet-proof, needs to “delay imple- es that can rise to the occasion.
ness, must be in place while not jeopardiz- mentations because of operational emergen-
ing operations during technology implemen- cies” will pop up like wildflowers in the
tation and test. spring.
Realistically, operations personnel will
not take the risk that the implementation of All or nothing More information
the “Oh so wonderful app” will compromise The reader might ask, “Does all this stuff This is the third article in a five-part se-
or shut down operations. have to get done to get Technical Process Ar- ries that defines and explores the ways an
The key idea is that a well-designed chitecture into play?” upstream organization would need to be
and reliable app must be supported by an im- The short answer is “yes.” As the table re-configured to fully leverage the use of
plementation process that is just as well de- above indicates, if one category of technical digital technology to improve the busi-
signed and bullet proof. process architecture is missing, the results ness. This article puts the responsibility
Safety and reliability of the implemen- are unacceptable. for exploiting digital technology squarely
tation process must be tested, tested, and Hopefully this article makes the case in the court of the operations organization.
tested, and then demonstrated to operations for strong technical processes as critical suc- dutch@hollandmanagementcoaching.com
managers who cannot afford disruption is- cess factors in gaining business value from Tel: +1 281-657-3366
sues. DOF. www.hollandmanagementcoach-
For implementations that were declared The perplexing aspect is that the con- ing.com/digitaloilfield
“deployments” by top management, one tents may be very different from both the

Increase production 25-200% by pulsing EOR

The effectiveness of enhanced oil recovery by flooding can be improved if the injection fluid (water or
carbon dioxide) is pulsed, says Alberta company Wavefront Technology Solutions Inc.
The company has developed downhole tools oilfields produce better, and geysers in Yel-
which can release the injection fluid in puls- lowstone National park produce more water,
es, rather than a usual steady flow. says Brett Davidson, CEO of Wavefront
The company claims that its clients Technology.
have seen an increase in production rate 25 The earthquakes shake up the subsur-
to 200 per cent within 4 to 12 months after face, and mobilize oil from the pores.
installing the technology, and achieved a 2 In a similar way, if EOR flooding fluid
to 5 per cent increase in ultimate recovery as is pulsed – switched on and off repeatedly –
a result of using it. it can mobilize oil from the pores like an
To understand how the system works, earthquake can. Wavefront's tool to add pulses to EOR fluid
consider that after earthquakes in California, The technology was originally devel- downhole

16 digital energy journal - Apr 2011

 Production
oped as a project by Dr Tim Spanos, a physi- wells. After a 2 year pilot, they ordered 50 ter to help
cist who specialised in general relativity, as tools, to be followed up by another order for decontami-
a study of the relationships between energy 10, and they have a further 45 tools to be de- nate it.
in the earth and fluid property. livered during 2011. In its
“We took his theory from the pages of The company has deployed 107 tools published re-
a notebook and put it into practise,” Mr altogether, in Alberta, Texas, California and sults for the
Davidson says. “It was a series of equa- Saskatchewan. It has contracts to deploy a quarter end-
tions.” further 227 (or is a further 120 check it’s a ing Novem-
“Dr Spanos and I started working on further 120 for a total of 227). Clients are us- ber 30 2010,
the lab proof of his concept in 1997. It has ing it both for waterfloods and CO2 floods. the company
taken us a number of years to develop the The company has experimented with had revenue
necessary downhole tools to have a fully different pulsing patterns, it can find a pat- of
commercial technology. We’re getting to the tern best suited to the type of rock and its at- CAN$925k,
point where we have a critical momentum of tributes. 60 per cent
acceptance of the technology. The company has created a simulator more than
Mr Davidson was previously manager to model how the system will behave in dif- the same pe- Brett Davidson, CEO of
of the geomechanics Research Group at the ferent types of reservoirs. It varies with the riod of 2009, Wavefront Technology
University of Waterloo, Ontario. fluid viscosity, permeability, thickness and and expenses
Wavefront Technology Solutions Inc. well structure. of $2.4m,
won its first client in 2007, an Alberta oil The company is also selling the tech- compared to $1.9m for the same period of
company, which tested the technology on 3 nology for use in groundwater remediation, 2009.
injection wells, pushing oil to 16 producing where chemicals are injected into groundwa-

Maersk – plan to make CCS pay for itself

Maersk Oil and Gas believes that it can significantly reduce the costs of carbon capture and storage of
carbon dioxide sequestered, by burning gas directly from an oilfield in oxygen, generating electricity,
using the resulting CO2 immediately for enhanced oil recovery, and possibly selling the resulting water if
it is in a region of water shortage (for example, desert)

The plan “gets us significantly closer to CCS

that pays for itself (i.e. without subsidies),”
N2 AIR SEPARATION O2 ZERO EMISSION
says Pieter Kapteijn, director Technology $R
UNIT [ASU] POWER GENERATION
EV
EN
and Innovation at Maersk Oil and Gas. UE
N2
FO
R IM
It has licensed a special combustion MI
SC
IBL
EE
technology from Clean Energy Systems of OR

California which enables the gas to be

burned in a combustor directly from the
field, with little or no pre conditioning re- POWER
EXPORT
quired on the gas.
H2O
What is special about the idea is that
most of the necessary systems – a combus-
tor, a generator, and a condenser, can be in-
stalled in a single plant, which is small $R
EV
E NU
enough to fit inside 3 x 40 foot box contain- EP
UR
EW
N AT
ers. ER
AT
IO ER
EN
RG
The only other piece of plant required PO
WE
CO2
UE
EN
is an air separation unit, a much larger piece EV OIL
$R

of plant, which needs to be kept a good dis- GAS

tance from the combustor for safety reasons. + CO2 OIL & GAS RESERVOIR

However this could be located offshore (see

below).
This means that the overall capital cost
of the system can be much cheaper than the
“conventional” concept for carbon capture
for gas. to produce a mixture of carbon dioxide, wa- to carry the carbon dioxide out to an oilfield.
With the “conventional” carbon capture ter and nitrogen; and this gas mixture goes With the Maersk concept, the gas en-
and storage concept, the gas is piped from through an expensive and high energy sepa- ters a relatively small plant which can be
the well to a gas power station (which may ration process to remove the carbon dioxide. close to the well (if it is on land) or close to
be a long way away); the gas is burned in air, An expensive pipeline infrastructure is built where the gas comes to shore. The outputs

Apr 2011 - digital energy journal 17

 Production
from the plant are electricity (which is rela- Cordova, California, which provides a way
tively easy to transport) and carbon dioxide to burn natural gas which is “dirty” (ie con-
(which can be sent directly back down taining CO2 and other contaminants, with-
neighbouring oil or gas well). There might out separating the CO2 and contaminants out
even be a customer for the water (from the first.
reaction of gas with oxygen) if it is in a The combustor is also much simpler
desert environment. than a conventional gas combustion plant.
With only a relatively small plant re- The combustion is carefully controlled,
quired on land, it seems likely that there with oxygen and natural gas or other fuels
should be less local objections to installing fed in exactly the right quantities for maxi-
it, compared to (for example) a new gigawatt mum efficiency.
scale power plant. The technology for the combustor was
The financial benefits of enhanced oil derived from the space rocket industry,
recovery or enhanced gas recovery are hard where the combustion has to be very care-
to quantify at this stage, and depend greatly fully controlled to ensure that the rocket
on the field and its stage of life and the rev- combustion products ejects from the com-
enues that can be generated from the elec- bustor in a stable and safe way. The key is to
tricity and water. achieve proper mixing of the O2, fuel and
In enhanced oil recovery, carbon diox- water to ensure that the flame is stable and
ide (which becomes liquid under high pres- the temperature controlled.
sure) can mix with oil and reduce its viscos- Clean Energy Systems won a USD
ity, making it easier to produce. This is a $30m grant from the US Department of En-
good way to increase overall recovery from ergy to further develop the technology and
the 35 to 50 per cent possible on convention- demonstrate its integration with a gas turbine
al operations, up to 60 per cent or more. The and generator.
theoretical maximum is estimated to be be-
tween 70-80%. Air separation unit
In enhanced gas recovery the carbon The system also requires an air separation
dioxide can be used to maintain the pressure unit to separate air into oxygen and nitrogen
of the overall field. by cryogenic cooling.
The idea of burning fossil fuels direct- The air separation unit is much bigger
ly in oxygen is not a new one – the “Integrat- than the other equipment and must be posi-
ed Gasification Combined Cycle” (IGCC) tioned away from the rest of the process for
technology for coal involves burning gasi- safety reasons.
fied coal in oxygen. But IGCC technology Maersk is looking at installing the air
has a much higher capital cost and involves separation units offshore. “It seems to be fea-
a much larger plant. sible without too much development work,”
Maersk plans to spend 2-3 years further Mr Kapteijn says.
developing the technology and is looking for
a launch project. Making it viable
For the system to be feasible, at a minimum
Combustion technology you would need a gas well, a customer will-
Maersk has licensed the combustion technol- ing to buy an additional steady supply of
ogy from Clean Energy Systems of Rancho electricity at the megawatt scale, and nearby
depleted oil or gas
wells which could use
a steady supply of car-
bon dioxide for en-
hanced oil recovery or
enhanced gas recov-
ery.
The system could
only work if every-
thing could be operat-
ed continuously – so
there was a continuous
supply of gas into the
system, electricity was
generated continuous-
ly, and the carbon
dioxide produced
The combustor carefully reacts natural gas with oxygen would continuously be
18 digital energy journal - Apr 2011
pumped into a
gas or oil
field.
This
means that
there would
need to be a
customer in
need of a con-
tinuous sup-
ply of elec-
tricity (“base
load”), or the
electricity
would need to Pieter Kapteijn, director
Technology and Innovation
be stored in
at Maersk Oil and Gas
some way.
The
overall viabil-
ity would increase if producing gas fields
which already contain a large amount of car-
bon dioxide, because it would not require a
process to separate out the carbon dioxide
before feeding the gas into a combustor, and
the carbon dioxide from the field could be
sequestered together with the carbon diox-
ide from combusting the gas.
The system could also be more viable
if it could earn money from carbon trading
schemes. EU emission allowances are cur-
rently being traded at around Eur 15 per ton
of carbon dioxide equivalent, which means
that a system like the one described above
could earn Eur 15 for every ton of carbon
dioxide sequestered.
Estimates of the overall cost of ‘con-
ventional’ carbon capture and storage vary
but are often around the Eur 50 per ton lev-
el, which means that if the Maersk concept
could reduce the cost by (for example) Eur
10 a ton, it would still cost Eur 35-40, too
high to be paid for by carbon trading at cur-
rent levels.
But if the carbon price rose, and a sys-
tem like the Maersk one could earn more
money than anticipated from the enhanced
oil recovery / enhanced gas recovery, then it
could start approaching viability.
Maersk also envisages providing the
system in partnerships with national oil com-
panies, whereby it would agree to produce
gas fields effectively (using enhanced gas re-
covery) and provide electricity, without
adding a single molecule of carbon dioxide
to the atmosphere, even if the gas fields are
already high in carbon dioxide.
For example several Middle Eastern
counties are showing a great deal of enthusi-
asm for low carbon technologies, and might
be keen to invest in a technology which
would enable carbon free electricity genera-
tion from gas.
 Production
Survey of spend analytics
OFS Portal surveyed 6 oil and gas operators who had recently done spend analytics programs to ask them
how it went - By Elaine Rothman, writing for OFS Portal
Oil and gas e-commerce organisation OFS
Portal conducted a survey of 6 oil and gas
operators in different parts of the world that
were known to have active spend analytics
projects (to analyse how they spend their
money).
The objective was to determine why
they had embarked on the projects, what
they were trying to accomplish, how they
had implemented the project (with a project
team or consultants), what were their re-
sults, what % of their spend was under man-
agement, what KPIs they used, what could
they have done better, what were the project
pain points and where are they going from
here.
Unanimously the companies contacted
said they were looking for visibility.
Companies were looking for a clearer
vision of spend while allowing greater visi-
bility to more category managers, business
units and often to provide business intelli-
gence to improve purchasing.
Two of the companies interviewed used
spend analysis to implement business trans-
formation, either creating a new central pur-
chasing organization or expanding the scope
of an existing purchasing organisation.
Some of the companies were managing
a project with 5 operating divisions where
others were collecting data from over 700
operating units.
In all cases the companies interviewed
had embarked on spend analytics as they
Spend analytics - do you know what your
company is spending and what you get for it?
20 digital energy journal - Apr 2011
were deploying e-procurement and electron-
ic transactions with their supply base.
At the lower end the objective was for
25% of spend “managed in the system”, to
up to 98%, where the last 2% of spend was
considered to be outside procurement.
Implementation project teams were
used in general, but not always. The teams
when present were often multidisciplinary –
purchasing, project management, IT, and ex-
ternal consultants.
External consultants were from the
software provider or technology implemen-
tation consultants.
With or without a team, the implemen-
tation time was from 12 – 18 months but for
varying “spend coverage”.
Some companies implemented a spend
analysis project to help prepare for imple-
mentation of an e-procurement project, seg-
menting suppliers into types of spend, and
looking for the best purchasing strategy for
each type of spend.
Some companies implement a spend
analysis project to help expand an existing
e-procurement project, focussing on the best
ways to control spend and increase adoption
of its e-procurement project.
Sell the project
Not surprisingly, when the spend analytics
project was “sponsored” by the executive
committee, buy-in was less of an issue,
though at times some business units were re-
luctant to have their numbers added to a cor-
porate project.
When the project was not sponsored by
top management there was a need to “sell”
the project internally – either to new busi-
ness units or to new category managers.
The task was to convince them to add
their data to the pool, and also to be trained
on the system to generate reports that they
could use.
In the case of one of the companies in-
terviewed who had neither top management
support nor a real project team, currently af-
ter 3 years only 30% of spend was under
management.
Software solutions
Many different types of (software) solutions
were implemented. All were with the addi-
tion of a specific tool, whether from the same
supplier as the enterprise resource planning
(ERP) software, or another software vendor
(in this case
integrated to
the ERP) or a
SaaS provider
(meaning the
software is
hosted by a
third party
and used as a
service, Soft-
ware as a Elaine Rothman
Service, now
sometimes re-
ferred to as
“in the Cloud”).
The ERP alone is not seen to be suffi-
ciently flexible to provide the needed report-
ing facilities as those of a tool designed
specifically for spend analytics.
All the companies interviewed were
SAP users, though some had other systems
in place also.
Some chose an integrated spend analy-
sis solution from SAP and others a third par-
ty SaaS provider.
Interestingly the results of an integrat-
ed versus a non-integrated solution from a
SaaS provider, in term of the benefits of
spend analytics were equivalent.
In the case of the companies that were
interviewed, those who had a real project
management focus and a “top down” view
where top management was behind the proj-
ect reached above 80% spend under manage-
ment whether they were using a third party
SaaS provider or had an integrated solution.
The implementation side and the use of the
tool, however, were different.
Some of the companies interviewed
had multiple ERP systems, as many as 50,
others had just 1.
Key performance indicators
The KPIs for spend analytics that were put
in place, were largely the percentage of
spend “captured” by the system, and a
growth rate of that spend.
In some companies it was the number
of business units reporting into the tool and
their respective % of spending being report-
ed.
For companies with a “category” ap-
proach it was the number of purchasing seg-
ments covered by the reports.
In all cases implementation was tracked
and KPIs reported.

Data problems
Surprisingly, whether a company had a sin-
gle instance of an ERP or 50, the difficulties
encountered in all cases were data related.
Data is the key to spend analytics, tak-
ing steps to enhance and control Master Da-
ta Management prior to implementing, or in
conjunction with implementing spend ana-
lytics is the key to success.
Even in companies using just a single
ERP instance, in this case SAP, data was still
a key issue, as many items are coded multi-
ple times, supplier names can be abbreviat-
ed, and supplier affiliations are not always
documented, product information records
may be created by multiple business units
and users.
If no program is implemented to con-
trol item creation in the ERP even with only
1 system, problems arise.
For spend analytics to provide the max-
imum value, the classification of products
and services must go to line item or SKU
level. Items need to be classified to know
what is being purchased, without this classi-
fication widget A may be the same as widget
B but the system will be unable to recognize
it, and items may be counted twice or even
more times. The UNSPSC code standard
would be good.
As the goal of spend analysis is visibil-
ity and accuracy – the data issues need to be
addressed.
In the companies interviewed, some be-
gan cleansing once they began to realize the
effect it would have on the spend analytics
project, others used the project to kick-start
a program they had on a back burner, but all
agreed that data and the accuracy of the data
was the largest hurdle.
Ease of use
Training for users and access to the spend
analytics tool depended both on the solution
deployed and the size and complexity of the
company.
Even at smaller operators the roll out to
more users seemed to be an issue, so this was
not size dependent.
Ease of use was cited more than once
as an important criterion to gain user accept-
ance, and widespread use.
Done differently?
When companies were asked what they
would have done differently, the responses
were varied.
One responded, “Next time I would
have a consultant who really knew my busi-
ness”.
At another, more initial training to fa-
miliarize users with the tools would have im-
proved acceptance.
One said, “We really needed true data
strategy before beginning the project”. Mas-
ter data needs to be clean prior to implemen-
tation.
In some SaaS models the data can be
cleaned in the spend analytics tool. Howev-
er this may not be reflected in the ERP, as
the process is to extract data from and not to
re-inject it to the ERP.
Spend analytics tools typically “re-
member” and “correct” data errors before
adding new data to the data set. An early im-
plementer of a new technology felt they
should have waited for the technology to ma-
ture; “we would have had a faster and cheap-
er deployment”.
All companies plan to continue with
their projects, and in some it has become
business as usual and are no longer consid-
ered a project.
Respondents said that the points that
could have been improved on were:
- Better control on the input data,
whether in the ERP, on invoices or on orders
or any other system the data was being ex-
tracted from.
- Extend the programs to include
supplier evaluations such that spend and sup-
plier performance data are all in one data-
base for reporting purposes
- Enlarge the scope to include all
suppliers working with the company.
- Make the system faster and more
flexible – meaning that they need a better re-
porting tool, even though they now have
something that is better than their ERP.
- Check and recheck data before
loading.
E-commerce
There is no clear trend on which goes first,
spend analytics or e-procurement but clearly
both do go together for the companies inter-
viewed.
Deploying electronic transactions with
business partners forces companies to use or
develop standards, and possibly adopt an in-
dustry standard.
This in turn requires suppliers to use
the standards mandated by the company.
This standardization can have a very
positive effect on data and particularly on in-
voice data.
When invoice data arrives electronical-
ly the quality and quantity of data available
for input into spend analytics is automatical-
ly of a higher standard and can accelerate the
breadth and quality of spend analytics.
An e-procurement project with suppli-
er catalogues can go even farther down the
standardization route.
Supplier catalogues contain data that
can be used in spend analytics to the line
Apr 2011 - digital energy journal
Production
item level. This allows for easier recognition
that widget A is indeed the same as widget
B, or not.
Depending on the company this data
can be used to purify the ERP master data,
and thus also the Spend Analysis data.
With the advent of the broad adoption
of e-commerce, true collaboration within the
supply chain gives the buyer community the
opportunity to agree on product classifica-
tion and description standards with its sup-
plier community.
This then allows for all inbound invoic-
es with its SKU detail from the suppliers,
when electronic, to be ready to drop straight
into the spend analytics program, giving ac-
curate and timely reports.
Benefits of spend analytics program
A spend analytics program provides the
following benefits:
Solid reporting (which means both accu-
rate and timely data), spend visibility
(which allows consolidation, globaliza-
tion and improved sourcing strategies),
true business understanding (who are my
key suppliers, and which are strategic),
faster response time – to retrieve the re-
quired data, a way towards contract com-
pliance – without visibility, control is not
possible.
Things you can find out about:
. Spend visibility – meaning what
was bought, by whom, from whom, how
much did it cost, where was it consumed.
. Controlling spend – do we know
what we are buying? Is it on contract? Do
we control who spends what?
. Off contract purchasing – do our
contracts cover what we need? Are all
business units implementing the negotiat-
ed prices and products? Are we correctly
aggregating spend?
. Are processes and programs in
place to address “strategic” spend as the
company needs to collaborate more close-
ly with the suppliers of complex products
and services?
. Consolidating spend for better ne-
gotiations – if we know what we buy and
from whom, it is easier to renegotiate and
plan.
. Reduce numbers of suppliers –
Some of the companies interviewed have
upwards of 250,000 suppliers, each sup-
plier relationship needs to be created and
maintained.
Link to full white paper:
www.ofs-portal.com/OFS-
Portal/Whitepapers/
21
 Production
Post Stuxnet – expect government hacking
After the Stuxnet worm attack which ‘created problems’ for Iranian nuclear centrifuges, every government
in the world will be honing up its hacking skills – and testing them out on IT installations with a military
value, like oil and gas companies, thinks LogRhythm’s Eric Knight
After the Stuxnet computer worm, which
managed to hack into Iranian nuclear plant,
operators of industrial equipment around the
world need to be more wary of hacking,
thinks Eric Knight, senior knowledge engi-
neer at LogRhythm, a log management and
security information event management
company.
It is not so much that Stuxnet revealed
the weaknesses in industrial IT systems. The
point is more that Stuxnet was widely be-
lieved to be created by a government organ-
isation – and other governments around the
world will want to make sure they have
hacking capability which can keep up.
And when they look for industrial cen-
tres with high military value to test out their
hacking skills on, the oil and gas industry
will come high on their list, Mr Knight
thinks.
“I would assume that every country that
has observed what has happened at Stuxnet
will be trying to create their own cyber se-
curity offence and defence plans to prevent
them becoming a victim of this.”
The oil industry is likely to be first on
the list because of its high military value.
“I’m sure that in the gas and oil industry they
are one of the most crucial infrastructures,
in a time of war or otherwise,” he says.
“So the chances are – every industry
will have a lot of prodding by people who
are government backed.”
“There are potentially hundreds of gov-
ernment sponsored organisations which
couldtry to hack into your IT systems to de-
termine the effectiveness of their programs
and gathering data for the future in case
something transpires.”
Stuxnet
Stuxnet was discovered in July 2010, and
was later credited by Iran’s president, Mah-
moud Ahmadinejad as managing to “create
problems for a limited number of our cen-
trifuges,” according to press reports.
This was the first time a worm has tar-
geted industrial systems, gaining control of
the SCADA (supervisory control and data
acquisition systems) to locate and infect the
centrifuges.
Before then, computer worms had
mainly only been developed to gain atten-
tion or to make money for hackers, such as
22 digital energy journal - Apr 2011
to install key loggers and get hold of peo-
ple’s credit card numbers.
“SCADA systems are lowest value to a
hacker. But the military value is extremely
high,” Mr Knight says.
Evidence for government backing
The amount of effort and organisation in-
volved in building Stuxnet suggests a gov-
ernment backer. Security experts have esti-
mated that it would have taken 5-10 people
working for 6 months to build.
The worm simultaneously successfully
targeted the Windows operating system (run-
ning on PCs behind the automation system);
an industrial software program which runs
on Windows, and a programmable logic con-
troller in the equipment.
It also included code for faking indus-
trial process control sensor signals so an in-
fected system does not shut down due to ab-
normal behaviour.
Whoever did it would have needed to
know which specific centrifuges were being
used in Iran. “It required a tremendous
amount of intelligence, time and a large di-
versity of resources, “Mr Knight says.
Other industrial attacks
There have been other attacks on industrial
equipment before, including one in Australia
which managed to open up sewage gates.
“That one was a fellow was trying to get his
job back by creating problems,” he says.
There was another incident where peo-
ple thought China had infiltrated US equip-
ment for the power grid in order to start col-
lecting information. “They saw the monitor-
ing taking place but no evidence of sabo-
tage,” he says.
LogRhythm tools
To create the best possible defence against
hacking, LogRhythm offers a system to con-
tinuously analyse equipment audit logs to get
the earliest possible warning of something
going on.
This means that, if a hacker wants to be
undetected, they need to both hack into the
equipment and hack into its logging system
at the same time, a much bigger hacking
challenge.
“It is very difficult if not impossible for
him to have both the opportunity to break in-
to the SCADA
equipment,
and get into the
main data cen-
ter to get into
the log man-
agement sys-
tem, to modify
specifically the
pieces they
were looking
for,” Mr
Knight says.
“This
adds so many Oil industry "likely to be
first on the list" - Eric
more levels of Knight, senior knowledge
protection.” engineer at LogRhythm
Lo-
gRhythm can receive a continuous stream of
logs from the automation systems and scan
it for operational anomalies, and provide im-
mediate notice of impending attacks or at-
tack attempts.
For example, the Stuxnet worm needs
to reprogram certain microchips in prepara-
tion for an attack, and the LogRhythm prod-
uct could spot this by looking through the
logs.
“It can create a forensics view of what
transpired,” he says. “You can put together a
time line of events that took place.”
The company can also help companies
install standards which will help them pre-
vent hacker sabotage, including making sure
they are storing the right information about
who is doing what on the system.
The system will work with any comput-
er system which can generate a log. “We’ve
done everything from Windows type log –
down to X-ray machines, door access. The
management of the records is really where
we’re focussing on.”
“Any type of computerised system with
a digital record that can be translated back
as a log can be sent back to LogRhythm"he
says.
Sometimes you have to analyse logs
from different systems to get a better under-
standing of what is going on. “When you add
the business pieces to the common infra-
structure pieces – you can create a very ro-
bust understanding – not only security but
also risk and problems that are taking place
inside your organisation,” he says.

GE Oil & Gas - $210m on research
GE Oil & Gas reports that it is quadrupling its research funding
GE Oil & Gas, the oil and gas division of
corporate giant GE, reports that it is now
spending $210m a year on research, four
times as much as it was in 2007.
Over the past 4 years, GE Oil & Gas
has been gradually building its footprint in
the industry, making 3 major acquisitions
(VetcoGray, Hydril Pressure Controls and
Sondex) and hiring 930 new employees (in-
cluding 600 hired in 2010).
The company wants to be able to pro-
vide a wide range integrated services and
equipment needed to support drilling and
production.
It now has 6,500 employees in the
drilling and production business. Its Oil and
Gas Annual Meeting in Florence in Febru-
ary 2011 attracted 1000 customers from 70
countries.
The company is building new service
centres in Angola ($40m investment), Brazil,
Nigeria, Australia (new campus and training
centre) and Singapore. It has 1600 services
staff, all with consistent training.
It hired 600 people during 2010 and re-
deployed 700 people in the regions to be
closer to customers.
“We want to have key shops in the ma-
jor locations, around the product line and
specific solutions,” says Manuel Terranova,
senior vice president regional operations and
global sales, drilling and production with
GE.
The company can now say, “we offer
the entire drilling package,” says Mr Terra-
nova.
GE also harnesses expertise from other
divisions of the company (outside oil and
gas). This includes software (it is actually
the 14th biggest software company in the
world); rotating equipment; remote monitor-
ing (including from aeroplanes); electronics
in harsh environments (such as at the top of
a wind turbine), equipment reliability (from
work in the nuclear industry). The company
has experts in materials sciences, aerody-
namics, combustion, flow and motor dynam-
ics.
The company operates an “Oil and Gas
University” in Florence, which has trained
252 students since 2005, particularly in lead-
ership, energy, oil and gas processes and ro-
tating equipment.
Macondo
The company is very proud of the contribu-
tion it made to trying to stop the flow of the
Macondo well in 2010.
After the disaster, “We were immedi-
ately contacted by BP and undertook a 24-7
effort to develop shutoff and containment
equipment,” says GE Product Manager Bob
Judge. The chairman of the company put to-
gether a team of the top 30 people to assist.
“Overall, we had 230 people working at var-
ious times on his effort, designing and test-
ing different pieces of kit.”
“We didn’t stop to talk about terms and
conditions, we said, we’re going to step up
and provide whatever help we can to assist
in ending the crisis. We were fortunate to be
a part of it, and in the end, BP was very gen-
erous in its thanks,” said Mr Judge.
GE went on to provide the blow-out
preventers on the final capping stack that
sealed the Macondo well, and both vessels
that drilled the relief wells had GE blow-out
preventers installed on board.
Acquisitions background
In February 2007 GE acquired VetcoGray, a
specialist in subsea drilling and production
systems, including “capital” (ie large scale)
drilling equipment, floating production sys-
tems, surface and subsea drilling systems,
subsea production systems and flow assur-
ance.
In October 2007 the company acquired
Sondex, a manufacturer of wireline tools, di-
rectional drilling and formation evaluation
systems.
In April 2008 it acquired Hydril Pres-
sure Control, which manufacturers blow-out
preventers, drilling control systems and sub-
sea systems.
Another acquisition, still in the works
at the time of writing the article, is of Well-
stream Holdings, a UK company which
makes flexible risers and static flowlines for
deepwater. This will enable GE to connect
seabed equipment to topside equipment
without using solid risers.
Sharing technology
GE strongly encourages the sharing of
knowledge between different parts of the
company, and discourages people from
keeping their technology to themselves.
“I tell product managers, you go steal
the ideas from the other GE businesses,” Mr
Terranova says.
One example is the microchips devel-
oped for wind turbines, which are now be-
ing used in subsea equipment, replacing the
Apr 2011 - digital energy journal
Production
custom-made
microchips
which GE’s
subsea depart-
ment had been
using.
GE’s
wind business
had developed
a chip that
could with-
stand high
levels of vi-
bration and
extremes of "We offer the entire drilling
package - Manuel
temperature
Terranova, senior VP
(very hot from regional operations and
the electron- global sales for GE
ics, but in drilling and production
very cold am-
bient temperatures).
“The wind guys worked with a chip
fabricator to make sure it is adequate for the
ruggedized environment,” Mr Terranova
says. “That would have taken us 3 years on
our own.”
Now many of the microchips in
VetcoGray drilling systems use these mi-
crochips. “Vetco tradition has always been
to embrace the best ideas regardless of where
they are from,” Mr Terranova says.
GE also strongly encourages the use of
standard operating systems and communica-
tions protocols rather than developing pro-
prietary ones. The software runs on the
UNIX open source operating system and
communications are in TCP-IP standard.
By using standard formats, it should be
easier to replace, fix or upgrade equipment
in the coming decades.
Semstar 5
GE has invested millions of pounds in de-
veloping a new control system for subsea
equipment called SemStar 5. To date, 84 of
the units have been supplied to Statoil.
Each circuit board in Semstar 5 has an
entire computer on it – so if one circuit board
fails, the other circuit boards are not depend-
ent on it.
Having a control system on the seabed
is essential for fast response. If the data had
to go to a surface installation for processing,
it would take too long. “Things are happen-
ing more quickly on the seabed,” Mr Terra-
nova says.
The control system uses Bayesian mod-
23
 Production
els (working with changing levels of proba-
bility) to determine if there is a serious prob-
lem.
It can be installed in older fields to re-
place the existing control systems, without
lifting any of the subsea equipment to the
surface.
GE is also building adaptors so that the
system can be installed on subsea equipment
(such as Christmas trees) built by other com-
panies.
Making BOPs better
GE (through its 2008 acquisition of Hydril
Pressure Control, a manufacturer of blow-
out preventers), has installed 18 blow-out
preventers s in Europe and 17 in the Gulf of
Mexico, and more throughout the world.
“We have systems that have operated at
higher temperatures and pressures than our
competitors‘ systems,” says GE product
manager, Bob Judge.
GE has research projects to try to im-
prove the shearing capacity, reliability and
remote monitoring capability of blow out
preventers . The Macondo disaster is likely
to increase market demand for these.
There is speculation in the industry that
there could be many new regulations about
blow-out preventers following the Macondo
disaster, such as asking for more shearing ca-
pacity and better monitoring.
GE personnel have attended all of the
post-Macondo hearings, to make sure that
GE gets as early as possible notice about any
new requirements. “The only thing we’ve
seen to date is potentially new shearing re-
quirements,” says Mr Judge.
GE is also looking at different materi-
als, and different shapes (‘geometries’) of
blade. “The results are not entirely clear.
We’ve seen geometries that have a signifi-
cant advantage and are scaling the promis-
ing designs up,” he says.
Until now, the state of the art shearing
ram could make a pressure of 4,000 pounds
per square inch (psi). GE is developing a ram
which can push at 5,000 psi.
One new idea is harnessing the pressure
of the sea in the blow out preventer r ram.
GE has an idea for doing this which in-
volves an empty (zero pressure) accumula-
tor vessel connected to the ram.
The blow-out preventer functions due
to a pressure differential across it, not ab-
solute pressure, because everything is al-
ready under the pressure of the seabed. So
for a 3,000 psi blow-out preventer r, if there
is pressure on the seabed of 4,500 psi, you
end up with 7,500 psi on one side and 4,500
on the other.
If there was a way to drain away the
4,500 ambient pressure to zero, then you
24 digital energy journal - Apr 2011
would end up with
a 7,500 psi pressure
differential, a much
bigger force. This
can be accom-
plished without re-
quiring additional
accumulator bot-
tles, which is im-
portant because the
amount of accumu-
lator bottles (hold-
ing high pressure
fluids to drive the
rams) increases ex-
ponentially with the
amount of force re- The Semstar5 subsea electronics module - GE has invested millions of
quired. A 4,000 psi pounds in the system, which can replace control systems on older
blow-out preventer equipment and give it a new lease of life
requires 8 x 160
gallon bottles, and a 5,000 psi blow-out pre- panies to revitalise old oilfields.
venter needs 61. It is developing a 13 mW, 12,000 pow-
Another area which could be improved er unit which can run subsea.
is the telemetry. For example, to monitor ram With Shell and BP, it is developing a
position, blow-out preventers send data to modular switchgear (system to control or
the rig about hydraulic fluid flow totals, isolate the flow of electricity), with switches
leaving engineers to make the assumption stored in a watertight chamber.
that if fluid has flowed into the rams, they It is developing a subsea transformer
must have closed. that can smoothen out AC, working with BP
But GE is developing sensors which Chevron and Total.
can tell you directly if the ram has closed, GE is developing a 36,000 volt trans-
and how much pressure it closed with. former for Chevron, to be run on its Jack and
The company is developing software St Malo fields in deepwater Gulf of Mexico.
tools which can download and analyse data It is developing improved sensors,
from a blow-out preventer, and report on its which can provide a better idea of what is
condition, showing, for example, how many going on, and new remote monitoring capa-
more times it can be activated before parts bility.
need changing. The software can be connect- GE is developing a subsea mud pump
ed to an enterprise resource planning (ERP) that can be used in dual gradient drilling.
system, so it can provide advice. Next time It has developed a 12mW electrically
you have the blow-out preventer on deck, powered subsea compressor, which is run-
you will need these parts to do the required ning for Statoil on the Ormen Lange field
maintenance tasks do. offshore Norway, in 900m of water, pump-
GE is also trying to build a standard in- ing injection gas into the ground – this has
terface that equipment from other manufac- been running since 2006. This avoids the
turers’ can plug into, like the USB interface need to build a surface platform to put the
on a computer. compressor on.
It has also developed a modem that can Statoil has been an important launch
be used to send video images from the customer for much of the subsea equipment.
seabed along a copper cable with limited The tax regime in Norway is very support-
bandwidth available. ive of industrial research, because money
It is looking for ways to extend the con- can be spent on research instead of spending
trol pods. Currently GE’s BOP control sys- it on tax.
tems can handle 96 functions, and each valve GE has set up a subsea ‘centre of ex-
or ram needs 2 control functions (on and cellence’ in Norway, with around 50 subsea
off), giving a maximum of 48 valves on the engineers.
stack. “We are developing a pod extension The company has set up a centre in the
module which gives you 8 additional func- UK to digest information from subsea equip-
tions,” Mr Judge says. ment and look for trends, to try to spot things
that might be going wrong. It has developed
Subsea electronics and equipment this capability when supporting the aviation
GE is developing a range of subsea electron- industry, and has many algorithms devel-
ics and equipment, in particular to help com- oped for aviation.
 Calendar
Ca
alendar
r of
o Events
Eve
entts 2011
Business opportunities
oppo orttunities with subsurface
subsurrface
a data
Wednesday,
Wednes
e ay, April
da Aprril 20, 2011
Hallam Conference
Conffe
errence Centre,
en Centrre, London,
London, £300
£30
00

Beyond
Beeyond Macondo
Maconndo
Tuesday,
Tues
u daay, May
ay 17,
Ma 7, 2011
17
The Geological Society,
S y, London,
Society London,
ondon
o Free
Free
e

Making digital
digital oilfield
o infrastructure
IT infr
rastr
a ucturre wwork
or
ok
Thursday,
Thurs ay, June 02,
da 0 2011
Hallam Conference
Conffe
errence Centre,
en Centrre, London,
London, £300
£30
00

Exploration
Explor
ration
a technology
chnology and business
tec s - focus
focus
o
on unconventionals
unconventio
e onals
Tuesday,
Tues
u daay, September
mber 20,
Septem 20 2011
Society,
y, London,
The Geological Society
S London,
o Free
Free
e

Improving
Impro ving inventory
ov inventorry management
Tuesday,
Tues
u da ay, October
er 04, 2011
Octobe
Aberdeen
Aber
rdeen
d Douglas
Dougl Aberdeen,
las Hotel, Aber
rdeen,
d Free
Free
ee

Exploring in the Arctic

e Arcctic
Tuesday,
Tues
u daay, October
Octobeer 11, 2011
Society,
The Geological Society
S y, London,
London,
o Free
Free
e

People
People and the
e e digital oilfield
Thursday,
Thursda October
ay, Octob ber 20, 2011
Conference
Hallam Conffe
errence Centre,
en Centrre, London,
London, £300
£30
00

Onshore seismic
e 3D se
eismic
Wednesday,
W ednes
e ay, November
da November
e 09, 2011
Society,
y, London,
The Geological Society
S London,
o Free
Free
e

3rd
3r collaboration
rd collaboraatio oilfield
on and the digital oilfie
eld
Thursday,
Thursda December
ay, Decem mber 01, 2011
Conference
Hallam Conffe
errence Centre,
en Centrre, London,
London, £300
£3000

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